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The Cabinet Committee on Economic Affairs of India has given its approval for the Redevelopment of Berths 8, 9 and Barge Berths at the Port of Mormugao, Goa on PPP mode.

The project is estimated to cost INR11,45 billion (US$171,6 million) and will be completed within 36 months from the date of award of concession. 

As we reported in mid April, Mormugao Port Trust awarded the PPP project, to Vedanta Limited's wholly owned subsidiary, Sterlite Ports Limited. Sterlite signed a MoU pursuant to the 'Letter of Award' for Goa on Develop, Build, Finance, Operate and Transfer (DBFOT) basis for a concession period of 30 years with the Mormugoa Port Trust.

The project envisages reconstruction of 3 old berths and replacement of 38 year old equipment by creating facilities for handling a variety of cargo like iron ore, bauxite, gypsum, limestone, fertilizers, steel coils and other general cargo at Mormugao Port catering to ships up to 1,85,000 DWT. The existing capacity of these old berths with 38 year old iron ore handling equipment is 13 Million Tonnes Per Annum (MTPA). As a result of modernization of berths, more efficient operations due to this project and utilization of deeper draft of 19.5 Mts. being created in the port, an incremental capacity of 6.22 MTPA would be added. 

This project is primarily meant for export of iron ore to meet the growing demand of Goan iron ore due to the lifting of ban on export of iron ore. 

Vedanta Limited is the largest exporter of iron ore from Goa and this project will provide logistic integration to its iron ore business apart from handling other cargo.

The ramp up of the Goan iron ore industry beyond 20 million tons through this port will be a significant gateway for the mining industry in the state giving them the added advantage of end to end scale of operations in terms of cargo movement and consolidation.

Sterlite Ports Limited currently owns and operates a 14 MMTPA capacity fully mechanized coal terminal in Visakhapatnam Port, Andhra Pradesh. Sterlite Ports will have a strategic presence on both west and east coasts in the traditional iron ore and coal hubs respectively.